Joe Biden has already taken office as president, and as expected, left-wing sectors within the Democratic Party are beginning to exert pressure to implement his radical agenda. Representative Alexandria Ocasio-Cortéz sent a subtle message on social media demanding the immediate cancellation of student loan debt.
Ocasio-Cortéz publicly called on President Biden to bypass Congress and cancel billions of dollars in student loan debt. Just days after he took office, President Biden extended debt repayment for millions of borrowers through September.
After news broke that Biden extended student debt payments through Sept. 30, 2021, Ocasio-Cortéz posted on her Twitter account a decisive message saying, “OK now let’s cancel them.”
OK now let’s cancel them https://t.co/KUt0wSacuj
— Alexandria Ocasio-Cortez (@AOC) January 21, 2021
Outstanding student loan debt has doubled over the past decade, approaching a hefty $1.7 trillion. The decision to suspend payments over the past year was a good move, considering the economic crisis that was unfolding as the CCP pandemic crippled the economy.
But leftist groups wanted to go even further. They began calling on the government to not only postpone payments but to take over the entire debt, relieving the debtors of their payment responsibilities.
Biden, under pressure from the radical left, pledged to cancel billions of dollars in student loan debt during his campaign and has even indicated that he will ask Congress to immediately cancel at least $10,000 in student debt for all borrowers in the first instance.
A recent study published by the Committee for a Responsible Budget indicates that paying off student debt as the left-liberals intend would cost the United States $1.7 trillion. Still, only $90 billion real dollars per year would be injected into the economy. This implies a very high cost for the state in exchange for a small benefit.
The leftist sectors, generally represented by liberal Democrats such as Ocasio-Cortéz, are pushing for the federal government to pay off the huge debt contracted. They use the argument of generating relief to the economy amid the crisis that some sectors are experiencing, especially those who lost their jobs due to the shutdown impositions promoted by the Democratic states.
However, the report clearly states: “There are a number of benefits and costs associated with canceling student debt. But as a stimulus measure, its “bang for buck” is far lower than many alternatives under consideration for the COVID relief already enacted.”
Another critical point promulgated by the report is that student debt cancellation is misdirected. Given that three-quarters of student loan repayments come from the top 40% of the population with the highest incomes, who would likely save the extra money rather than spend it. This is not efficient for the intended purpose of reactivating the economy.
The report also states that more than 70% of the laid-off workers, who are most in need of government assistance at this time, are not college educated and therefore are not the ones who are in debt.